Private Health Insurance: The Range of Average Annual Premiums in the Small Group Market by State in Early 2013

What GAO Found

GAO reported the range of average premiums for health insurance products sold to small employers in the small group market of each of the 50 states and the District of Columbia during the first quarter of 2013. The average premiums reflected information from data submitted by insurers to the Center for Consumer Information and Insurance Oversight (CCIIO) within the Department of Health and Human Services' (HHS) Centers for Medicare & Medicaid Services (CMS). They represented an annual average of the premiums paid per covered life by all small employers that purchased a particular product. Actual average premiums per covered life for each employer may have been higher or lower than our calculated average premiums per covered life, because each employer’s premiums would have been determined based on the health status of its employees and other factors.

About 19 million Americans obtained health coverage through health insurance purchased in the small group market in 2011. Prior to 2014, premiums for small employers could have varied under applicable state law based on factors such as the age, gender, and health status of employees. As of 2014, under the Patient Protection and Affordable Care Act (PPACA), insurers are no longer able to use health status to set premiums for small employers and are restricted in the amount they can vary such premiums based on age and tobacco use. As a result, beginning in 2014, the way insurers calculate premiums for the small group market may have changed. GAO was asked to report the range of premiums in the small group market in 2013. GAO examined the range of average premiums per covered life for the small group market in the first quarter of 2013. A range was developed for each of the 50 states and the District of Columbia overall and by different network provider types.